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Raytheon (RTX) Arm Wins $66.1M Contract to Support F135 Engines
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Raytheon Technologies Corp.’s (RTX - Free Report) business unit, Pratt & Whitney, recently secured a modification contract involving the F135 engine. The Naval Air Systems Command, Patuxent River, MD, has awarded the deal.
Valued at $66.1 million, the contract is scheduled to be completed by February 2024. Per this contract, Raytheon will provide design engineering, long lead material and hardware, weapon system integration and various other support services for the F135 engine.
The majority of the work related to this deal will be carried out in East Hartford, CT.
What’s Favoring Pratt & Whitney?
Pratt & Whitney, a forerunner in manufacturing aircraft engines for military business jets, enjoys a significant order inflow. The unit has been under contract to produce and sustain the F135 engine for the U.S. government’s F-35 Joint Program to power the single-engine F-35 Lightning II aircraft produced by Lockheed Martin (LMT - Free Report) .
F135 propulsion system configurations are used for the U.S. Air Force’s F-35A, the U.S. Marine Corps’ F-35B and the U.S. Navy’s F-35C jets. F135 engines are also used in F-35 aircraft purchased by Joint Strike Fighter partner countries and other countries through foreign military sales arrangements.
The strong demand for F-35 leverages Pratt & Whitney to witness a consistent flow of orders for the F135 engine. In this context, it is imperative to mention that Lockheed Martin has delivered 894 F-35 airplanes since the program's inception, signifying the parallel demand for the F135 engine that powers this stealth aircraft.
Going forward, LMT anticipates F-35 delivery numbers in the band of 147-153 jets per year in 2023 and 2024. Lockheed Martin also expects to supply nearly 156 jets in 2025 and beyond.
RTX is likely to have its order book full for the production of F135 engines and related support services contracts, like the latest one. This should bolster the company’s revenues from the Pratt & Whitney business unit.
Peer Prospects
The tremendous demand that LMT’s F-35 jet enjoys tends to benefit not just RTX but one more defense major that plays a critical role in its manufacturing:
Northrop Grumman (NOC - Free Report) : The company is accountable for the production of the center fuselage of F-35, along with the design and production of AN/APG-81 Active Electronically Scanned Array fire control radars and the AN/AAQ-37 Distributed Aperture System and AN/ASQ-242 Communications, Navigation and Identification avionics suite.
Northrop has a long-term earnings growth rate of 3.8%. Its investors have gained 2.9% in the past month.
Price Movement
In the past month, shares of Raytheon Technologies have increased 2.8% compared with the industry’s growth of 6.4%.
Image Source: Zacks Investment Research
Zacks Rank
Raytheon Technologies currently carries a Zacks Rank #3 (Hold).
The long-term earnings growth rate of TDG is 25.1%. The Zacks Consensus Estimate for Transdigm’s 2023 sales suggests a growth rate of 19.5% from the prior-year reported figure. The Zacks Consensus Estimate for TDG’s 2024 sales calls for a growth rate of 10.9% from the prior-year estimated figure.
The Zacks Consensus Estimate for Transdigm’s 2023 earnings implies a growth rate of 40.2% from the prior-year reported figure. The Zacks Consensus Estimate for TDG’s 2024 has been revised upward by 11% in the past 60 days.
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Raytheon (RTX) Arm Wins $66.1M Contract to Support F135 Engines
Raytheon Technologies Corp.’s (RTX - Free Report) business unit, Pratt & Whitney, recently secured a modification contract involving the F135 engine. The Naval Air Systems Command, Patuxent River, MD, has awarded the deal.
Valued at $66.1 million, the contract is scheduled to be completed by February 2024. Per this contract, Raytheon will provide design engineering, long lead material and hardware, weapon system integration and various other support services for the F135 engine.
The majority of the work related to this deal will be carried out in East Hartford, CT.
What’s Favoring Pratt & Whitney?
Pratt & Whitney, a forerunner in manufacturing aircraft engines for military business jets, enjoys a significant order inflow. The unit has been under contract to produce and sustain the F135 engine for the U.S. government’s F-35 Joint Program to power the single-engine F-35 Lightning II aircraft produced by Lockheed Martin (LMT - Free Report) .
F135 propulsion system configurations are used for the U.S. Air Force’s F-35A, the U.S. Marine Corps’ F-35B and the U.S. Navy’s F-35C jets. F135 engines are also used in F-35 aircraft purchased by Joint Strike Fighter partner countries and other countries through foreign military sales arrangements.
The strong demand for F-35 leverages Pratt & Whitney to witness a consistent flow of orders for the F135 engine. In this context, it is imperative to mention that Lockheed Martin has delivered 894 F-35 airplanes since the program's inception, signifying the parallel demand for the F135 engine that powers this stealth aircraft.
Going forward, LMT anticipates F-35 delivery numbers in the band of 147-153 jets per year in 2023 and 2024. Lockheed Martin also expects to supply nearly 156 jets in 2025 and beyond.
RTX is likely to have its order book full for the production of F135 engines and related support services contracts, like the latest one. This should bolster the company’s revenues from the Pratt & Whitney business unit.
Peer Prospects
The tremendous demand that LMT’s F-35 jet enjoys tends to benefit not just RTX but one more defense major that plays a critical role in its manufacturing:
Northrop Grumman (NOC - Free Report) : The company is accountable for the production of the center fuselage of F-35, along with the design and production of AN/APG-81 Active Electronically Scanned Array fire control radars and the AN/AAQ-37 Distributed Aperture System and AN/ASQ-242 Communications, Navigation and Identification avionics suite.
Northrop has a long-term earnings growth rate of 3.8%. Its investors have gained 2.9% in the past month.
Price Movement
In the past month, shares of Raytheon Technologies have increased 2.8% compared with the industry’s growth of 6.4%.
Image Source: Zacks Investment Research
Zacks Rank
Raytheon Technologies currently carries a Zacks Rank #3 (Hold).
One better-ranked stock from the same industry is Transdigm Group (TDG - Free Report) , which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate of TDG is 25.1%. The Zacks Consensus Estimate for Transdigm’s 2023 sales suggests a growth rate of 19.5% from the prior-year reported figure. The Zacks Consensus Estimate for TDG’s 2024 sales calls for a growth rate of 10.9% from the prior-year estimated figure.
The Zacks Consensus Estimate for Transdigm’s 2023 earnings implies a growth rate of 40.2% from the prior-year reported figure. The Zacks Consensus Estimate for TDG’s 2024 has been revised upward by 11% in the past 60 days.